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Cash Waqfs in Syria

It was Bruce Masters who challenged, for the first time, Mandaville’s assertion that the jurists in the supposedly more pious Arab provinces of the Ottoman Empire did not sanction cash waqfs. In view of the solid data provided by Masters from Syria, Mandaville’s assertion is not anymore valid (Mandaville, 1979; Masters, 1988: 162-163). The earliest evidence Masters has been able to find dates from 1597 when the governor Ahmed Mataf established a cash waqf with a huge capital of 10,000 gold dinars. The terms of the endowment fixed the “economic interest rate” at 10% and stipulated that the money should be lent to persons who held wealth or office. The policy of the waqf was thus to lend conservatively at minimum risk to a select group of borrowers, but the return to be earned was to be spent for the benefit of the poor. More specifically, Mataf’s waqf was a so-called avarız vakıf designed to reduce the burden of extra-ordinary taxes levied on a particular district of the town.

Another specific example illustrates how this worked in practice. Consider a waqf established by a certain Mehmed A a for the poor of the quarter of al-Farafira in Aleppo. From the accounts for the year 1659-1600 presented to the local judge we learn that the principal of the endowment was a much smaller 500 gru which had yielded an “economic interest”, murabaha fi sene-î kâmile, of 100.5 gru . Thus the rate of “economic interest”, 20%, was twice as much as Mataf’s waqf. Of the return generated, 95 gru was spent, again, to help the district pay its taxes. The remainder of the money, as well as the 4 gru left from the previous year was spent for unnamed projects benefiting the district.

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Another observation of Masters pertains to the orphanages, which apparently also functioned as cash waqfs. The interest charged by these was more or less the same as other cash waqfs, i.e., in the 10-20% range.

In nearly all the cases, Masters appears to have been impressed by the very low rates of default prevailing in the cash waqf sector of Aleppo. For Masters, the explanation for these low rates lies “in the nature of Muslim society, in which families constituted corporate bodies, responsible for the actions of individual members”. Most loan agreements established the responsibility of a guarantor, kefil, for the debt. If the borrower defaulted, family members could be held responsible for repayment of a relative’s debt for up to 15 years after the loan was contracted. Should the debtor be present in the city but unable to repay the loan on schedule, two options were possible.

The first involved rescheduling the loan into instalments until the loan was repaid. Setting up the reschedulement often prompted disagreement among the parties and led to court cases. In one of these cases, the judge ruled that instalments would only be legal if they had been stipulated at the time the loan was contracted or if both parties had agreed in court later on to a scheme of repayment. Failing either of these conditions, the loan had to be paid in total at the time stipulated by the original loan contract. The alternative involved delaying the payment until a later specified date. This also required the agreement of both parties in court before it became legally binding.

If either of these compromises failed and if there were no family members to assume the responsibility of the debt, the debtor would be jailed. In this case, however, another system came to the aid of the debtor. Assuming that he was known to be a decent person, residents of his quarter, mahalle, would come together and collectively bear the responsibility of his debt. In one particular case dated July 31, 1718, Muslim residents of a mahalle collectively assumed responsibility for a Christian’s debt and had him released.

Source: Murat Cizakca, A History of Philanthropic Foundations: The Islamic World From the Seventh Century to the Present. Republished with permission.